UAE Sukuk Market Surges

UAE's Islamic securities have delivered an average return of 2.5% since January 20, making them the top performers in the Bloomberg benchmark for sukuks. This surge has positioned the UAE as a prime destination for global investors seeking opportunities. Key players like Emaar Properties PJSC and Aldar Properties PJSC have significantly contributed to this growth.

Driving this success is the booming real estate market in Dubai and Abu Dhabi, fueled by expat-led demand for residential, commercial, and office spaces. House prices in these cities have seen substantial increases, with high rental yields and government-backed developers boosting investor confidence. Emaar's sukuk maturing in 2029 is trading near its highest level, reflecting the company's strong performance and credit upgrades.

Emaar, a major player in Dubai's property market, saw record sales and profits last year. Emaar Development PJSC's property sales surged by 75%, and its backlog climbed by 59%, assuring investors of future revenue. Aldar also reported impressive results, with a 51% increase in earnings before interest, taxes, depreciation, and amortization.

Aldar's success is partly attributed to its focus on overseas and expat customers, with 78% of its sales coming from this segment. The company's recent green sukuk issuance was heavily oversubscribed, indicating strong investor interest. Analysts highlight Aldar's leading market position in Abu Dhabi and its strong ownership structure as key factors driving its growth.